Friday, December 6, 2019

November's Jobs Report

Some strong news for the economy out today: The government reported this morning that the economy added 266,000 jobs in November. The unemployment rate ticked back down to 3.5 percent, matching a low from earlier this year that at the time was the lowest since 1969.

The U.S. economy has now added an average of 180,000 jobs each month this year, compared with an average monthly gain of 223,000 in 2018. November marked the 110th consecutive month of job gains.

The strongest industry in November was the health care and social assistance subsector (including child daycare and family services) saw a net gain of 60,200 jobs. Manufacturing technically had its best month for hiring since August 1998, although that was almost entirely thanks to General Motors workers returning from their strike.

Wednesday, December 4, 2019

Waiting for the Earnings Rebound

Two months into the fourth quarter, analysts have shaved 4 percent off their earnings estimates to $41.12 a share. That's a drop of almost 1 percent compared with a year ago, following a 1.3 percent decline last quarter.

It's common for earnings expectations to drop as a period progresses, but the current pace has been exceeded only twice since 2015. Analysts now expect earnings to rebound sometime next year, although it might be well into 2020 before profits rise meaningfully. The consensus forecast is for a 9.2 percent gain for next year.

Eight months ago, analysts projected fourth-quarter profits would jump more than 9 percent after falling in the first few months of the year. They now see contraction for this quarter and don’t expect a return to 10 percent growth until the second half of 2020.

Tuesday, December 3, 2019

Manufacturing Slump Continues

Tough news for the economy: Manufacturing activity continued to lag in November with a decline in inventories and new orders, according to the latest ISM Manufacturing reading. The November reading came in at 48.1, down slightly from the previous month’s reading of 48.3.

The number denotes the percentage of manufacturers planning to expand operations. A reading below 50 represents contraction; November was the fourth straight month below the expansion level.

Manufacturing is considered a reliable bellwether for how the rest of the economy is doing, though it accounts for only about one-fifth of GDP. Inside the ISM report, new orders slumped to 47.2, down 1.9 percentage points from October’s 49.1. Inventories, a key input for GDP, came in at 45.5, down 3.4 points from the previous month.

Monday, December 2, 2019

Good News From Black Friday

Americans spent more money Black Friday shopping in 2019 than ever before. Brick and mortar sales were up 4.2 percent over last year, according to an annual holiday spending report from Fiserv, Inc.

Electronics and appliances accounted for $214 per transaction on average, while shoppers spent $101 on sporting goods and $81 on shoes and clothing. Shoppers were willing to travel for a discount: A quarter of consumers traveled more than 25 miles to visit a physical store.

Online shopping also pulled in a record $7.2 billion on Friday, according to Salesforce. That's a 14 percent increase over last year. Even on Thanksgiving itself, digital sales in the U.S. rose 17 percent to $4.1 billion.